Traffic Acquisition Cost - TAC

What is a 'Traffic Acquisition Cost - TAC'

A traffic acquisition cost (TAC) consists of payments made by Internet search companies to affiliates and online firms that direct consumer and business traffic to their websites. Traffic acquisition costs (TAC) are a critical cost of revenue for Internet search firms such as Google, Yahoo and Baidu.com. TAC for these firms is watched by investors and analysts to ascertain whether cost of traffic acquisition is rising or declining. Rising TAC has a detrimental effect on profitability.




BREAKING DOWN 'Traffic Acquisition Cost - TAC'

Many Internet companies report revenues both on a gross basis, and on a net basis that excludes TAC. One key metric for these companies is TAC as a percentage of advertising and search revenue, with a rising percentage indicating cost pressures on profitability. Sometimes companies will mention payments excluding traffic acquisition costs using ex-TAC.

RELATED TERMS
  1. Total Asset-To-Capital Ratio - ...

    A leverage covenant placed on Canadian Institutions regulated ...
  2. Targeted Amortization Class - TAC

    A type of credit derivative that is similar to a planned amortization ...
  3. Risk-Adjusted Capital Ratio

    A measure of a financial institutions that compares total adjusted ...
  4. Foot Traffic

    The presence and movement of people walking around in a particular ...
  5. Super PO

    A companion tranche structured as a Principal Only (PO) bond, ...
  6. Acquisition Cost

    1. The cost that a company recognizes on its books for property ...
Related Articles
  1. Investing News

    Alphabet Is Now Bigger Than Apple

    I don't see a reversal happening in GOOGL stock, especially with Alphabet management more motivated to maintain their market cap lead over of Apple.
  2. Investing

    How Google's Search Engine Makes Money

    A deep analysis of how Google's search engine and related services have made it one of the biggest companies on the planet.
  3. Financial Advisors

    A Financial Advisor’s Guide to Google Analytics

    Google Analytics is a great tool to help advisors measure the effectiveness of their web efforts. Here's a quick guide.
  4. Personal Finance

    How The Internet Web Ad Industry Works

    Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
  5. Fundamental Analysis

    Search Engines That Compete With Google

    While Bing now controls a substantial part of the online search market, the real threat to Google's dominance may come from unexpected places.
  6. Fundamental Analysis

    Yahoo, Google Back Together in Search Deal

    Google and Yahoo have signed a search deal yet again. The question is whether this one will stick.
  7. Entrepreneurship

    How Twitter Cards Can Help Drive Traffic to Your Website (TWTR)

    Understand what Twitter cards are and how they are used to increase website traffic. Learn about the top six ways these cards drive Web traffic.
  8. Fundamental Analysis

    Yahoo To Use Google Search Results. Yes, Again.

    Can Google remain the world's top search engine forever? Yahoo's on-again, off-again agreement to offer Google search results in Yahoo seems to suggest that Google will not be dethroned any time ...
  9. Investing

    Is Google Beginning to Lose Its Dominance in Search?

    While Google remains king on the desktop, the migration to mobile threatens its leadership in search.
  10. Mutual Funds & ETFs

    Google: Should It Be Part of Your Portfolio?

    For Google investors, the past year wasn't so stellar when compared to recent history. So what happens next?
RELATED FAQS
  1. How important is advertising revenue in the Internet sector?

    Learn about the importance of advertising revenue in the Internet industry. Find out how much Internet firms rely on advertising ... Read Answer >>
  2. How do Internet companies profit if they give away their services for free?

    Learn how companies in the Internet sector make a profit when service, content and user applications are offered at no cost ... Read Answer >>
  3. What are the main reasons for investing in the internet sector?

    Explore key reasons for investing in companies in the Internet sector. Learn about leading companies delivering products ... Read Answer >>
  4. What developed countries have the greatest exposure to the Internet sector?

    Find out which developed countries have the greatest exposure to the global Internet sector, lead by global Internet companies ... Read Answer >>
  5. What does it mean when airline revenues are adjusted for air traffic liability?

    Understand how the accounting method used by airlines requires them to adjust revenues for air traffic liability and when ... Read Answer >>
  6. What are examples of popular companies in the Internet sector?

    Discover which Internet companies are the most popular among investors in this high potential growth area of the technology ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center